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Auto Insurance: What You Need to Know

Learn the basics of auto insurance so you can get the right coverage for the best price.

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Nobody enjoys dealing with things they don’t understand—especially when they have to pay for it.
For example, can you imagine putting yourself into debt just for the privilege of learning a bunch of facts and figures that you’ll probably never use again? (Oh wait … sorry college students.)
Thankfully, Quotehound has you covered when it comes to understanding car insurance.
Below you can find a quick and easy introduction to the world of automobile insurance, including what it is, why it’s necessary, and how to find the best deals so you can balance the right coverage for the best price.

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What Is Auto Insurance?

At the most basic level, automobile insurance is an agreement between you and your insurance company that provides a benefit for both parties.
The benefit for your insurance company is that it receives the money from your insurance premiums every month. The benefit for you as a car owner and driver is that you receive financial support and other types of assistance if you are involved in an automobile accident.
In other words, if you do get in an accident, you’re not alone; you’re covered.In fact, in most cases, your car insurance policy will make sure you pay only a fraction of the total cost of an auto accident—including medical costs and the cost to repair or replace the vehicles involved.
Best of all, you will receive that support even if that accident was your fault.There are several different types of automobile insurance that can be included in an insurance policy, but these are among the most common:

Personal Injury Protection

Also known as PIP, personal injury protection covers any medical costs that may be incurred by you or your passengers as a result of an accident. PIP is required in some states and optional in others.

Uninsured / Underinsured Motorist

In a perfect world, everyone would have more than enough car insurance. However, we don’t live in a perfect world. Therefore, you are at risk of being stuck with a major bill if you are hit by a driver who has no insurance (uninsured) or not enough insurance to cover the costs (underinsured). Uninsured and Underinsured Motorist coverage protects you against that risk.

Collision

When you have collision coverage, you receive money to repair or replace your car if you’re involved in an accident—even if the accident is your fault. Most policies require you to pay a specified sum of money toward the repairs first, which is called the “deductible.” Once you’ve met the deductible, the insurance company pays for the rest of the damages.

Comprehensive

Comprehensive coverage is called “comprehensive” because it applies to anything that might happen to your car other than an accident—theft, vandalism, falling rocks or branches, storm damage, flood damage, and more

Liability:

Liability coverage pays for damages that occur in an accident when you are at fault. Importantly, this includes both medical and property costs, and it includes damages suffered by both you and any other parties involved in the accident. Liability insurance is critical because it protects you from lawsuits if you are sued after an accident.

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How to Choose a Company for Car Insurance

3 steps you can take right now to find the auto-insurance company that’s just right for you
If you’ve spent any time watching TV recently, you’ve probably noticed there are a lot of insurance companies out there—there’s the commercials with the caveman, the ones with the lizard, the ones with that lady who reminds you of your weird aunt, and more.
And every one of those insurance companies has one major thing in common: they want your business.

So how do you choose?
Especially with something as important and necessary as car insurance, how do you decide which company is right for you?Here are three steps you can take today that will get you ready to make that important choice.
Most people don’t enjoy having someone try to sell them something—that’s just human nature. But what’s even more frustrating is having someone try to sell you something when you kind of think you might need it, but you’re not sure.

So, the first thing you need to do when it comes to choosing a car-insurance company is figure out exactly what you need. That way, you can have much more control over the purchasing experience, because you’ll know what you are shopping for—and what you’re not interested in buying.

For example, one question you can answer before you begin shopping is whether you want to place a higher priority on equipping yourself with the most coverage or saving money by finding cheaper insurance options. If it’s important for you to find the lowest possible rates, that’s something you should determine before you start shopping—and something you should make clear to the companies you contact.

Here are some other questions to think through and answer before you seek out insurance companies:

Do you prefer to have lower monthly payments or lower deductibles?

Do you want to speak with the same agent each time you talk to your insurance company, or are you okay being assigned a new person with each new claim?

What types of auto insurance do you need?

Those types include liability, collision, comprehensive, personal injury, uninsured motorist, and more.How much can you afford to pay for car insurance?

Important: what types of insurance or coverages do you NOT want included in your policy? Write down the “extras” you don’t want up front, that way you can spot them and remove them from policy quotes.
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Once you have a good idea of what you need—and what you don’t need—from your car insurance policy, it’s time to see what insurance companies are willing to offer. Because make no mistake: rates and policies do differ from company to company, and sometimes even agent to agent.

Some of the policy decisions will be outside of your control. For example, each state has minimum coverage thresholds, which means you won’t be able to cut some types of insurance altogether, and there may be a certain amount of coverage you have to purchase in order to be legally insured in your state. Within those boundaries, however, there can be a lot of room for flexibility.

Another important step is to see what kinds of discounts companies will offer you. If you have already purchased life or homeowners insurance from a company, for example, you can likely qualify for a bundled discount on your car insurance. Other companies may offer a discount if you qualify as a safe driver, if you have a high credit score, if you have not filed many claims in the past, and so on.

The point is this: don’t be afraid to communicate what you want as you shop for car insurance. And don’t be shy about asking companies to help you in finding the policy that best fits your needs.
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Receiving a quote from an agent, company, or website can feel like a long process. But don’t let that push you into settling for the first quote you receive. Instead, you’re likely to find a much better deal if you’re willing to shop around.

As mentioned earlier, auto insurance is a competitive industry, so there will always be some variation in prices and coverages from company to company. If you’re willing to put in the time to compare quotes from multiple companies, you’ll be in a good spot to pick out the right deal for you at the right price.

Here’s the great news: Quotehound can help you save time and effort in two ways when it comes to comparing car-insurance companies and quotes.

First, offers a quick and simple way to review and compare auto-insurance d

Second, by entering your Zip code here, will do the hard work for you by matching you with qualified agents in your state who can contact you with their best policy rates based on the coverage you need. All you have to do is sit back and choose the deal that fits you best.
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5 Car Insurance Mistakes You Can Avoid

Mistake 1: Failing to Fully Understand Your Coverage

Mistake 3: Making All Your Insurance Decisions Based on Money
Mistake 5: Not Taking the Time to Shop Around
Mistake 2: Missing Possible Discounts
Mistake 4: Paying Insurance Premiums Every Month
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